Not so 'rock' solid. What have we learnt?

This credit problem is taking me back to the last big story I worked on where a financial economy crisis had real economy consequences: the Asian market meltdown of 1997.

Then, an attack on currency regimes resulted in a broader financial collapse which ultimately saw former high-flying CEOs become newspaper sellers in some markets.

Rags to riches on cheap credit, and back again when the credit dried up. The catalyst may be different this time, but it's hard not to imagine there won't be further real economy fall out.

Mortgage lenders in the U.S. have been re-trenching and shuttering offices for some months now. The Fed has responded by providing liquidity and confidence. Earlier this week the Bank of England told us it wasn't its job to ease the pain of companies that have pursued flawed business models or reckless lending. And then along came Northern Rock.

Let's be fair, there isn't a serious suggestion that NR is suffering major bad loan problems or isn't an ongoing business. It's having what we all have at times, a little cash flow crisis. If it were more serious, no doubt the Bank of England wouldn't have extended financial terms. However, it does leave the Central Bank's insistence that it would take a hard line looking a little wobbly.

You or I might be left to rue the way we have managed our finances when we creditors come knocking, but when you are the fifth-biggest mortgage lender in the UK, terms are somewhat different.

So what we have learnt so far is: this credit crisis is far from over and continues to claim casualties, we still don't know how far it will run and who could be next; and finally, central banks and politicians are going to intervene to soften the impact (despite their claims about the moral hazard of bailouts).

Our guest host today, Simon Goodfellow from ING, suggested watching the Spanish banks closely. They have been exposed to a major housing bubble and some run a similar business model to NR (low deposit base relative to loan book).

He still thinks equities go up over a 12-month story. Just don't get too excited about buying just yet.